Results of an opinion survey on the 1977 budget proposal of the Energy Research and Development Administration


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Results of an opinion survey on the 1977 budget proposal of the Energy Research and Development Administration
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Jackson, Henry M ( Henry Martin ), 1912-1983
United States -- Energy Research and Development Administration
United States -- Congress. -- Senate. -- Committee on Interior and Insular Affairs
U.S. Govt. Print. Off. ( Washington )
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Table of Contents
    Front Cover
        Page i
        Page ii
    Memorandum of the chairmen
        Page iii
        Page iv
    Table of Contents
        Page v
        Page vi
    I. Summary of results of opinion survey
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
    II. Opinion survey responses
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
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        Page 64
        Page 65
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        Page 67
        Page 68
    III. Opinion survey letter
        Page 69
        Page 70
Full Text
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M. JACKSON, Chairman





MARCH 1976

Printed for the use o(if the
Committee on Interior and Insular Affairs





68-272 0


HENRY M. JACKSON, Washington, Chairman



GRENVILLE GARSIDE, Special Counsel and Staff Director
DANIEL A. DREYFUS, Deputy Staff Director for Legislation
WILLIAM J. VAN NESS, Chief Counsel
D. MICHAEL HARVEY, Deputy Chief Counsel
OWEN J. MALONE, Senior Counsel
W. 0. (FRED) CRAFT, Jr., Minority Counsel

FRANK CHURCH, Idaho, Chairman

HENRY M. JACKSON, Washington


RUSSELL R. BROWN, Professional Staff Member
S CHRISTOPHER COccIo, Science Consultant

- I.e


I -


* *.,%. -.
a a
1. .






In February and March 1976, the Senate Committee on Interior and
Insular Affairs, Subcommittee on Energy Research and Water Re-
sources, conducted hearings on the fiscal year 1977 budget proposed by
the Energy Research and Development Administration. In order to
help identify areas requiring consideration during the hearings, an
opinion survey was sent to a group of non-Government energy experts.
These experts are affiliated with industry, academia, and trade organi-
zations, and they have a unique vantage point from which to assess
ERDA's 1977 budget proposal because of their participation in a con-
gressionally sponsored evaluation of ERDA's long range plan for
energy independence during 1975. Thus, they are in a unique position
to assess ERDA's proposed 1977 efforts relative to ERDA's long range
goals. Their comments are included in this committee print for the
benefit of Members of the Congress and others interested in the prog-
ress of ERDA's program. We are grateful for the cooperation of those
who responded to the committee's questions. A summary of the results
of this opinion survey appears as the first section of this document.
Ch airman Committee on
Interior and Insular Affairs.
Chairman, Subcm m tit ee on
Energy Research and WVater Resources.




Memorandum of the Chairmen--------------------------------- i------
I. Summary of results of opinion survey---------------------------- 1
A. The opinion survey----------------------------------------- 1
B. Response to questions (1) and (2)------------------- 1------- 1
C. Summary of responses to question (3)------------------------ 4
II. Opinion survey responses:
Professor David Rose------------------------------------------ 8
Dr. Paul P. Craig------------------------------------- ------- 13
Dr. Roland W. Schmitt----------------------------------------- 19
Mr. M. S. Sadler---------------------------------- ---- ------- 25
Mr. Russell J. Cameron----------------------------- ---------- 36
Dr. Alvin M. Weinberg--------------- -------------------------41
Mr. Eric H. Reichl-------------------------------------------- 46
Pro(fess.or George 0. G. Lf------------------------------------ 47
Dr. Jerry Grey--- ------------------------------------------- 49
Mr. Sheldon H. Butt------------------------------------------ 50
Mr. R. M. Lundberg ------------------------------------------ 61
Professor S. S. Penner---------------------------------------- 65
III. Opinion survey letter------------------------------------------- 69

Digitized by the Internet Archive
in 2013




The opinion survey letter in its entirety is shown in section III
of this report (p. 69). The questions asked are repeated below for
(1) Based on your participation in the Office of Technology
Assessment's analysis of the ERDA long range plan, how would
you allocate $1,000 to the various major programs in 1977?
Fossil Energy
Solar Energy
Geothermal Energy
Fusion Power Development
Fission Reactor Development
Nuclear Fuel Cycle
Environmental Control Technology
(2) How could you allocate $1,000 to the subprograms in
one or more of the program areas with which you are familiar?
(3) Please provide any comments or suggestions you might
have regarding the proposed 1977 budget. Of special interest
are opinions reached by your panel regarding the long range
plans, that are not reflected in next year's budget.

Seventeen individuals were surveyed, and of these 12 responded.
Nine of the individuals responded to question (1) regarding the
breakdown of the direct energy R. & D. budget, and their responses
are averaged and presented in table I below. The table also shows
ERDA's breakdown and compares the two in the last column. In
general the non-nuclear areas would increase and the nuclear areas
would decrease if the averaged recommendations of the non-Govern-
ment energy experts were followed. The results are also presented in
pie chart form for the reader's convenience in figures 1 and 2. Most
of the respondents used $100 million in their analysis for the amount
of money in geothermal R. &D., the remaining $50 million being
available for loan guarantees. Therefore, the 3.6 percent recommended
for that technology is not considered to be a significant, result.



Average recom- Comparison of
mendations by non-Government
Proposed by non-Government breakdown to
Amount ERDA energy experts ERDA's breakdown
Program (millions) (percent) (percent) (percent)

Conservation---------------------......................-. $120 4.9 6.7 137
Fossil energy--...----.---.------------- 477 19.6 23.4 '19
Solar energy.-----.-------------------. 160 6.6 7.2 19
Geothermal- ------------------------ 100 4.1 3.6 212
Fusion power---------- ------------- 392 16.1 11.5 229
Fission reactor----------- -----------..... 823 33.7 31.2 27
Nuclear fuel cycle-----.......-------------- 347 14.3 13.3 27
Environmental control-------.. ----- 16 .7 3.1 1 343
Total------------- ----------- 2,435 100.0 100.0 .......

SHigher than ERDA.
2 Lower than ERDA.

TABLE II.-Recommendations by Non-Government Energy Experts Regarding
ERDA's proposed 1977 budgets in the Conservation, Fossil, and Solar Energy

Program, su.bprogramns, and
amounts (in millions)
Conservation, $120:
Electric energy systems and storage, $46.8_
Industry conservation, $12.4------
Buildings conservation, $21.6 ------
Transportation energy conservation, $23.7-
Improved conversion efficiency, $15.5---
Fossil energy, $477:
Liquefaction, $73.9 ----------
High Btu gasification, $45.2---------- -
Low Btu gasification, $33 --------
Advanced power systems, $22.5 -----
Direct combustion, $52.4- .-------
Advanced research and support, $37.1--
Demonstration plants, $107.2-- -----
Magneto-hydrodynamics. $37.4-------
Petroleum and natural gas, $37.2----
In situ technology, $31.1----------
Solar energy, $160:
Direct thermal heating and cooling, $45.3-
Agricultural process heat, $3----------
Solar electric, $102.5----------
Technology support, $4 -----------
Fuel from Biomass, $4.3 --------


Decrease ERDA's budget.
Increase ERDA's budget.
No significant change.
Increase ERDA's budget.
No significant change.

Decrease ERDA's budget.
Increase ERDA's budget.
No significant change.
Increase ERDA's budget.
No significant change.
Decrease ERDA's budget.
No significant change.

Increase ERDA's budget.
Decrease ERDA's budget.
Increase ERDA's budget.




Fossil 19.6% \

Nuclear Fuel Cycle



Control .7%

FIGURE 1.-Percentage breakdown for energy R. & D. proposed
year 1977, BA.

by ERDA, fiscal

68-272 0 76 2

FIGURE 2.-Average percentage breakdown for ERDA energy R. & D. recom-
mended by non-Government energy experts (fiscal year 1977, BA)

For question (2), responses were provided in the areas of conserva-
tion, fossil energy, and solar energy. Three to five individuals re-
sponded in these areas, and this was felt to be too sparse to present an
average comparison with ERDA's budget. However the average was
calculated and used to make a qualitative recommendation for increas-
ing or decreasing a particular subprogram. These results are presented
in table II. It should be noted that where a given program was in-
(creased overall, a decrease in one of its subprograms relative to other
subprograms may still represent an increase in the original figures.

There were many comments and suggestions made by the survey
group, and some of these are presented here, selecting those that were
mentioned by two or more of the respondents. Many of these com-
ments are also reflected in the recommended budget changes of sec-
tions A and B.


Summnzarized Significant Comments
1. The overall energy budget (less than $3 billion) is not adequate,
considering that we will spend $28 billion for foreign oil this year.
2. A more balanced program is needed. There is too much emphasis
in the nuclear programs relative to the non-nuclear programs.
3. The conservation program is weak both in dollar level and pro-
gram quality.
4. A greater relative emphasis in shorter term payoff programs (10-
15 years) is needed in the ERDA budget.
5. Too much money is being allocated to MHD, which is an over-
promised technology.
6. More emphasis is needed on advanced power systems such as
gas turbines and bottoming and topping cycles.
7. Present coal liquefaction processes are highly inefficient and un-
economical. Costly demonstrations should be limited and more em-
phasis given to process development.
8. The solar funding is seriously unbalanced and more emphasis
should be given to solar heating and cooling relative to solar electric
9. Not enough money is being spent on the highly important en-
vironment control problems associated with the various energy options.
10. Electric energy systems and energy storage programs, while
excellent in concept and execution, are not normally considered con-
servation. More generally, electric energy generation lacks a home
of its own and is spread through various budgets.

................. .................


This section contains the twelve responses to the opinion survey in
their entirety. The responses appear in the order listed below:
Professor David Rose, Department of Nuclear Engineering, Massachu-
setts Institute of Technology, Cambridge, Massachusetts.
Dr. Paul P. Craig, Council on Energy and Resources, University of
California, Berkeley, California.
Dr. Roland W. Schmitt, Manager, Energy Science and Engineering,
Corporate Research and Development, General Electric Company,
Schenectady, New York.
Mr. M. S. Sadler, Assistant Director, E. I. du Pont de Nemours &
Co., Wilmington, Delaware.
Russell J. Cameron, Cameron Engineers, Denver, Colorado.
Dr. Alvin M. Weinberg, Institute for Energy Analysis, Oak Ridge.
Mr. Eric H. Reichl, President, Conoco Coal Development Company,
Stamford, Connecticut.
Professor George 0. G. Lbf, Solar Energy Applications Laboratory,
Colorado State University, Fort Collins, Colorado.
Dr. Jerry Grey, American Institute of Aeronautics and Astronautics,
New York City, New York.
Mr. Sheldon H. Butt, President, Solar Energy Industries Association,
Olin Brass, East Alton, Illinois.
Mr. R. M. Lundberg, General Staff Engineer, Commonwealth Edison,
Chicago Illinois.
Professor S. S. Penner, Director, Energy Center, University of Cali-
fornia, San Diego, California.



77 Massachusetts Avenue

Cambridge, Massachusetts 02139

Room: 24-210

February 6, 1976

Senator Henry M. Jackson, Chairman
Committee on Interior and Insular Affairs
United States Senate
Washington DC 2051U

Dear Senator Jackson:

In reply to your 30 January letter, I am pleased to assist
The Senate Interior and Insular Affairs Committee in its task
of examining the FY 77 ERDA budget request.

First, here are my answers to your direct questions, with some
associated comments. But please note the further discussion
of part (3) below.

1. Based on my participation in the OTA assessment analysis
of the ERDA long range plan, how would I allocate $1000 among
these various major programs?

Fossil Energy
Solar Energy
Geothermal Energy
Fusion Power
Fission Reactor Development
Nuclear Fuel Cycle
Environmental Control Tech.

$ 150 (way up)
50 (up substantially)

But please note that I would also include environmental and
health consequences as major, main-line items, and allocate
$200 to those broad areas besides; this is about double the
present ERDA FY 77 fraction. See (2j) below for more details.

2. How would I allocate $1000 to each of various sub-programs?

(a) Conservation

Electric Energy Systems

Energy Storage Systems
Industry Conservation
Building Conservation

$ 50 (much smaller,
& EPRI should
do it)
300 (much more)

Senator Henry M. Jackson
February 6, 1976
Page 2

Transportation 100 (get FEA & DOT
much more active)
Improved Conversion
Efficiency 150

(b) Fossil

Not capable of judging well on short notice, but
(i) cut down MHD, which is highly over-promised,
and won't help that much anyway; (ii) increase
advanced power systems (gas turbines) even more,
if possible, including bottoming cycles as well
as topping ones; (iii) ensure that the Federal
Government gets its own better data base on

(c) Solar

Direct Thermal Heat & Cool $ 450 (much more)
Agric. & Process Heat 60
Solar Electric 440 (less)
Tech. Support & Utilization 30
Biomass 20

Note that biomass is less, because if you can grow something
to burn, you can grow something to eat, and rood will be more
critical; but I am in favor of converting biomass waste and
other wastes that exist now into fuel, if they cannot reasonably
be recycled into the land.

(d) Geothermal

Not expert enough to give a breakdown.

(e) Fusion

Magnetic Confinement $ 200
Development & Technology 300
Research 200
Reactor Projects 200
Laser Fusion 100

Note that the distinction between large "confinement systems"
and "reactor projects" is blurred, and the 400 total is more


Senator Henry M. Jackson
February 6, 1976
Page 3

More comments on Lusion are:

(i) Do not support the Sandia electron beam fusion to
any great extent, because the idea probably won't make
a fusion reactor ("Stat. Highlights", p. 20).

(ii) Support 14 Mev high intensity neutron facilities,
but not the LASL version without a review; I think
better ones may be available ("Stat. Highlights", p. 21).

(iii) Don't support high energy lasers for fusion very
much because the concept is probably not viable (p.21).

(f) Fission Power Reactor Development

LMFBR (total) $ 670
Water-cooled breeder 40
Gas-cooled Reactors (total) 110 ) Note
Molten Salt breeder 30 ) Especially
Light Water Reactor Tech. 50
Reactor Safety Facilities 50
Support, etc. 50

The main difference here is my attempt to broaden the nuclear
options, and give more meaningful assistance to our present
light water reactor program. In future years, I'd increase
the funding for alternatives even more.

(g) Nuclear Fuel Cycle

Uranium Resources $ 100
Support Nuclear Fuel Cycle 200
Commercial Waste Mgmt. 275
U-235 Process Dev. 200
Adv. Isotope Sep. Tech. 150
Nuclear Materials &
Safeguards 75
Apparently missing: any appreciable program on Thorium utili-
zation; otherwise, this program looks about right.

(h) Environmental Control Technology

The sum is too small. How do we get the
carcinogens and NO out of new coal tech-
nology products? ft won't be easy.


Senator Henry M. Jackson
February 6, 1976
Page 4

(j) Environmental Research

(i) It should be at least doubled, from the
202 million B/A for FY 77.

(ii) It should include substantial funds for
epidemiological and other studies of the ef-
fects of fossil fuels.

(iii) It should include at least 50 million
for education and training, curriculum devel-
opment, etc. I argued this in OTA and The
House Committee on Science & Technology, and
believe this year even more firmly that the
energy program will be hobbled by lack of well-
trained people.

(iv) Planning and analysis is still strangely
placed in this area. What is the relation to
Roger Legasse's group in planning and analysis,
under Seamans? I am in favor of intelligent
planning at all levels, needless to say.

(k) Basic Research

Material Sciences should be increased, mainly
in the non-nuclear related areas.

3. Other Comments.

(a) This budget is appreciably improved over the FY 76
originally submitted version, and ERDA should be con-
gratulated for stronger programs in conservation (es-
pecially, end-use), nuclear waste management, and
nuclear fuel cycles, for example.

(b) Still, is the budget adequate for the task (a
question asked by OTA)? We expect to pay about $28
billion for foreign oil this year, and here we have a
direct energy RD&D Program proposed for less than $3
billion. The benefit/cost ratio for a more vigorous
program would be large. New energy will be expensive.

68-272 0- 76 3


Senator Henry M. Jackson
February 6, 1976
Page 5

(c) ERDA is too timid, another point made by
strong inference last year by OTA. Where are
studies of international effects, socio-
economic effects, energy options for cities,
education and training, public information (I
don't mean advertising or articles in scholarly
journals, although the latter is laudable), ar-
rangements for coordination with other govern-
ment and non-government groups, commercialization,
attention to constraints, etc?

Some of these activities are listed in the "Program
Support" section, yet I fear that they will be in-
adequate, if past history is a guide.

We need an ERDA that steps out to cover every bit
of unoccupied important intellectual area related
to energy, and persists in doing so until either
the ground is covered or some higher authority
says "Stop"; if the latter, we can then debate the
situation from there.

(d) Conservation is still too gingerly approached.
The benefits are immense, and we will need to con-
serve all we can.

(e) I enclose a 60-page essay on our present energy
problem, written from a long-range point of view;
it is the introductory summary of my MIT course on
Energy this year. Your staff may find it useful.

This concludes my response to your letter. Please call or
write if you wish more information.

Yours sincerely I7






Council on Energy and Resources BERKELiY, CALIFORNLA 94720

February 9. 1976

The Honorable Henry M. Jackson
United States Senate
Committee on Interior and Insular Affairs
Washington, D.C. 20510

Dear Senator Jackson:

I am very pleased to respond to your request to comment upon the ERDA budget
submission to the Congress for FY 1977. This is the first budget developed
entirely by ERDA, and consequently is of particular significance as a state-
ment of ERDA objectives and priorities.

General Comments

The major challenge facing ERDA during its first year was to overcome the
image of the Atomic Energy Commission of an agency promoting a particular
technology--nuclear energy--and to develop a balanced national program which
would open many options to the nation. Such a balanced program would lead
to a multiplicity of national choices for the evolution of our energy system.
And such a program would provide comprehensive information on the disbenefits
as well as the benefits of each option--the environmental, social, public
health and safety information which is essential if wise national choices
are to be made.

An excellent framework for such a balanced program was in fact laid out by
ERDA itself in its plan for Energy Research Development and Demonstration
(ERDA-48) submitted to the Congress on June 30, 1975.

Unfortunately, the ERDA budget for FY 1977 does not make major progress in
achieving such a balanced program.

The emphasis upon nuclear energy which was characteristic of AEC is retained
in ERDA. Solar energy and energy conservation, two areas identified by ERDA
in its planning documents as being of importance comparable to nuclear energy,
remain very small relative to nuclear. The following numbers illustrate this

eNuclear fission and fusion projects, which were 52% of the ERDA
budget in FY 76, are 50% in the FY 77 budget. There is no signifi-
cant change in program balance.



*The total budget for solar energy ($116 million) is less than half
(46%) of the increase alone in the fission and fusion programs ($267

*The total budget for energy conservation ($91 million) is just one-
third of the increase alone in the fission and fusion program ($267

In considering these numbers it must be observed that a low relative budget
in an area does not in itself demonstrate inadequate support. The potentiality
for payoff of the area, the proposed program plan, and the need for federal in-
volvement are factors which must also be taken into account. In my opinion,
the opportunities present in both solar energy and energy conservation warrant
federal involvement at levels above those of the ERDA budget document. The
following pages offer commentary on several specific ERDA programmatic areas.


ERDA appears to have made a decision to emphasize electrical applications as
the dominant long term application for solar energy. This is consistent with
a general emphasis within ERDA on high technology approaches to energy supply,
and de-emphasis on lower technology approaches (e.g., industrial process heat)
which might well turn out to be technically simpler, cheaper, and more reliable.

eThe Solar energy program has made a programmatic decision to emphasize
predominantly electricity production, and building heating and cooling.
Bioconversion, which has major potentialities, is actually downgraded
in the FY 77 budget (from $3.830 million (FY 76) to $3.0 million (FY 77).

eAgriculture and process heat activities are also downgraded (from $3.7
million (FY 76) to $2.5 million FY 77).

eThe Solar Energy Research Institute mandated by Congress but not yet
acted upon in any way by ERDA is budgeted for $1.6 million in FY 76
but only $1.0 million in FY 77.

This suggests that ERDA does not intend that SERI rapidly become a
highly visible center of solar research activity. In my opinion, such
a center is a necessity if solar is to achieve the prominence it de-
serves, and if a strong national solar research community is to be

The imbalance of the ERDA solar program may also be illuminated by comparing
the budgetary priorities with the potential impact of solar energy as estimated
in the Project Independence report. The comparison is shown in the following
table, which suggests that bioconversion is being underfunded relative to other
approaches. The photovoltaic budget is adequate, but the emphasis on mass
production in contrast to improving scientific knowledge may not lead to the
strongest program.



Project Independence ERDA FY 77
Accelerated Implemen- Solar Budget
1990 2000

Heating and Cooling 30% 9% 31 %

Solar Thermal 0.4% 3.4% 24 %

Wind Conversion 41% 13% 11%

Bioconversion 18% 29% 2.7%

Ocean Thermal 4% 18% 6.3%

Photovoltaic 6% 18% 20%

Other (Technology Support, 5%
SERI, etc.

Total impact quadrillion BTU 4.92 38.8

% of projected U.S. demand 3% 22%

*Totals do not add to 100% due to rounding.

The solar program document provides no suggestion as to how priorities are devel-
oped. The above table suggests (and review of the solar program confirms) that
increased attention to methods for determining budgetary priorities is needed in
the solar program if the promise of solar energy is to be realized.


ERDA has primary federal responsibility for the maintenance of the soundness
of fundamental science in the energy area (The National Science Foundation, which
formerly played a major role in this area, now has virtually no energy program.)
The 9% increase in the basic science program from $187.9 million (FY 76) to $204.4
million (FY 77) is barely enough to offset inflation.

The long term solution of energy problems will require increased knowledge in
many areas. Examples are materials research and combustion research. Knowledge
developed in these and other areas can be expected to contribute to the strength
of the more technical programs, and the presence of persons carrying out basic
research constitutes a resource which can be drawn upon by the applied ERDA
programs. The basic science activities in ERDA are not well coordinated with
the needs of the developmental programs.


This program was held to an increase of 8%, approximately constant in fixed
dollars, yet the environmental research program is critically important to the



ERDA mission, for early identification of environmental problems associated with
emerging energy systems offers the only hope for timely preventive action. These
programs should be closely coordinated with energy supply technology programs,
and especially in the development of environmental impact statements (including
generic statements) on these programs. The AEC developed over many years a strong
capability for understanding the effects of radiation. Similar programs are re-
quired for fossil fuels. An encouraging sign is increased emphasis in the envi-
ronmental research program on expanding the systems analytic capability within
ERDA. This program (Analysis and Assessment) can provide ERDA with advance warn-
ing of potential problems with implementation of new technologies, and could prove
critical if ERDA is to avoid the problems with public acceptability which proved
so damaging to the AEC.


The task of energy conservation is to escape from historic patterns of exponential
growth in energy demand with minimal adverse societal impact. Energy demand is
highly differentiated in both its causes and its patterns. While supply technolo-
gies tend to be few in number and expensive, energy conservation approaches are
diverse and extensive. Thus, the design of a coherent, effective energy conser-
vation program may be expected to prove far more complex than the design of most
energy supply programs. A well thought-out program plan is a necessity to justify
the substantial budget which energy conservation warrants but does not have.

Unfortunately, conservation is the weakest portion of the ERDA budget, both in
dollar level and in program quality. The total proposed budget is $91 million -
only 3.8% of the ERDA energy budget. This results in funding levels which are
far too modest across the board in the conservation program. The situation is
compounded by seriously deficient program design, which does not convincingly
justify increased emphasis in conservation. The challenge to the conservation
program is to bring in persons capable of developing a good plan, to fully
justify each element, and to build up a major program. The ideas exist, but
have not effectively penetrated ERDA.

Within the conservation budget are large elements not in areas generally con-
sidered to be energy conservation. The program element labelled "Electric
Energy Systems and Energy Storage" is budgeted at $37.9 million a full 39%
of the total conservation budget. This program element is dominated by research
on technologies such as superconducting transmission drives and advanced bat-
teries. These projects are generally excellent in concept and execution and
are important for ERDA to carry out. But to label them conservation programs
is misleading. The rationale for improved underground transmission, for exam-
ple, is (properly) based entirely on environmental and right-of-way considera-

While the electric technology programs are long range in character, most of the
rest of the conservation program has a remarkably short-range orientation. The
dominant objectives seem to be:

@Short term pay-off in energy savings.

*Fast pay-off in dollars.



Because energy conservation is such a new area there do exist many opportuni-
ties for improvement characterized by very rapid pay-off periods. Programs
targeted for short term pay-off are clearly critical to rapid implementation
of energy-conserving technologies and programs. ERDA should, however, also
take a longer view, including within its program projects with long term
objectives as well, for here there is considerably less incentive for private
sector investment.

New energy supply technologies are capital intensive and carry high risk. To
be commercially acceptable these systems must operate for decades. Amortiza-
tion time for a power plant is typically thirty years. Energy conservation
programs should provide a balance which includes elements with long as well
as short economic pay-off times. It is the long term projects which are likely
to prove of most importance for changing the energy intensity of our society,
just as ERDA's energy supply projects are primarily oriented toward meeting
the critical long term needs of the nation.

It will be particularly necessary to emphasize those projects which are not
readily carried out by the private sector. These are not necessarily extremely
large projects (although they may require expensive demonstrations) but may
have a highly diversified and fragmented domain of implementation.

The overall conservation budget shows little evidence of an aggressive stance.
Some examples of the timidity of the program are:

*A section called "Dissemination and Transfer" (page CR/U-45) calls for
the establishment of Energy Action Centers in each state. A convincing
rationale for such centers is given. However, for such centers to be
effective at large scale communication each one would need to operate
at an annual level approaching $1 million. Yet the total project budget
is just $500,000.

eUrban design offers an extremely attractive area for a major, long range
program which could fundamentally affect our use of energy. The energy
implications of urban design are touched upon in the Community Systems
program, budgeted at $5.7 million. This budget is barely enough for one
demonstration and to achieve broad impact there would have to be many
demonstrations throughout the nation (a point clearly appreciated in the
solar heating and cooling plan, which recognizes the need for geographi-
cal dispersion).

Ioln the industrial sector experience to date shows the potential for
considerable increases in the efficiency of energy use. Designs of
energy conserving equipment and processes can cost hundreds of thou-
sands of dollars each and must be numerous as there are many industrial
processes. Further, some projects such as an energy optimized industrial
park study (page CR/U-14) could cost very much more, if the task were
well executed, while offering the potential for major energy savings.
Yet, the total industrial sector budget is $9.26 million. Federal invest-
ment in industrial energy conservation merits a large share of the total
ERDA budget slated to go to industry for the development and commerciali-
zation of new energy technologies. Conservation has at least as great a
likelihood of pay-off as do investments in supply options.



Finally, it must be noted that the Conservation program has been characterized
by extreme organizational instability and confusion. With a few exceptions
the program has projected an image of lack of sharp focus, and of rapidly
changing objectives. This has made the program very difficult for those out-
side of ERDA to deal with. A major shortcoming within the program is the
virtual absence of an analytic element with responsibility for laying out and
analyzing energy conservation options. Such a program element is relatively
inexpensive, but serves as the all-important compass to provide the informa-
tion necessary for determining direction.


The synthetic fuels commercialization program included in the ERDA budget
has a negligible budget. The strong Administration support for this program
and its potential large size assures that this program will be the subject of
much discussion and debate during FY 77. This program could have the effect
of heavily subsidizing a set of unproven supply technologies with high environ-
mental costs. If such a program is to be established, the possibility should
be considered of expanding it to include energy use technologies. A major com-
mercialization (or subsidization) program in energy conservation could well
have more impact on the U.S. energy system than a corresponding supply program.


ERDA is rapidly developing a funding procedure which relies extensively upon
"Requests For Proposals." This procedure, which is excellent for well defined
projects, is less suitable in diverse or poorly structured areas, or in areas
where new fundamental knowledge must be developed. Too heavy reliance on RFP's
can deter the support of innovative ideas. Many of ERDA's responsibilities
lie in areas where innovation may be critical (solar and conservation are
examples). Rather than constraining its programs ERDA should expand its capa-
bility to respond to innovative unsolicited proposals in areas outside of
established programs or cutting across ERDA's programmatic categories.

This situation is especially serious for the University research community.
Unless special precautions are taken the resources of the universities may
not be effectively utilized by ERDA. While ERDA has taken limited actions
to address this problem, it is my observation that the situation is deteri-
orating, and requires more attention from ERDA management.

It has been a pleasure for me to have this opportunity to comment upon the ERDA
FY 77 budget. I will be pleased to expand upon any of the points raised.

Yours sincerely,

Paul P. Craig

cc: E. Daddario, Director
Office of Technology Assessment




SCHENECTADY. NEW YORK 12301. Phone (518) 346-8771

Building K-l, Room 3A18
February 27, 1976

Senator Henry M. Jackson
Chairman--Committee on Interior
and Insular Affairs
United States Senate
Washington, D.C. 20510

Dear Senator Jackson:

In response to your letter of January 30 regarding ERDA's
proposed F.Y. 1977 budget, I have shown below ERDA's proposed
proportionate allocations of $1000 among various programs com-
pared to my own allocations. A few comments are also added in
each case. These are my personal views and do not necessarily
reflect those of General Electric.

These proportionate allocations are not independent of
ERDA's total budget; for example, should ERDA's budget be in-
creased or decreased substantially the recommended ratios
would change. The ratios given below assume a total budget
comparable to that proposed by ERDA for F.Y. 1977. Also, it
assumes comparable management and technical skills in adminis-
tering each part of the budget, and substantial involvement
of industry in each part of the budget.

In arriving at the conclusions below, I have applied the
following criteria for evaluating the programs:

1. Energy impact: measure of percentage of U.S. con-
sumption saved, produced, or converted.

2. Necessity for R&D: is the solution of the problem
completely dependent on new technology or is it
basically non-technical?

3. Necessity for government involvement: is development
proceeding at a satisfactory rate in private
industry or is progress dependent on government

68-272 0 76 4


Senator Henry M. Jackson -2- February 27, 1976

4. Technical barriers: can the barriers be solved by
demonstrating already developed technology or
are there formidable technical barriers?

5. Alternative solutions: are there easily developed
alternative solutions or is the approach unique?

6. Implementation probability: if the R&D is successful,
will it be easily implemented or are there large
socio-economic barriers yet remaining?

7. Time frame of implementation: when will a product be
expected on the market 1976-1985; 1985-1995,
after 1995; after 2025?

These criteria are quite similar to ones we have been using
in establishing priorities for our own energy R&D programs. I
believe they provide the kind of disciplined approach needed to
assure adequate support for programs most likely to help solve
our energy problems. They will also help screen out those pro-
grams which do not promise significant energy contributions,
however interesting they may be from a purely technical and
scientific viewpoint.

In the allocations that follow, I have restricted considera-
tion to only the Direct Energy Programs of the RD&D portion of
ERDA's budget; moreover, the item of $50M in budget authority for
the Geothermal Loan Guarantee Program has been omitted. Initially,
$1000 is allocated among the eight major Direct Energy Programs;
then the amounts allocated to each of these are further allocated
to sub-programs. The principal differences between ERDA's alloca-
tions and those given below stem from the relative emphasis on
short term vs. long term programs. I believe that there should
be greater relative emphasis on short term programs with good
prospective payoff until such time as we have assured our energy
supply for the next 10-15 years. As such assurance comes into
view, a gradual shift of emphasis toward the more permanent but
longer term energy options would then be appropriate.



Senator Henry M. Jackson -3- February 27, 1976

1. Allocation of $1000 among major programs

ERDA 1977 B/A

Conservation 50 80
Fossil Energy 200 270
Solar Energy 67 50
Geothermal Energy 21 20
Fusion Power 164 80
Fission Reactor Development 345 300
Nuclear Fuel Cycle 146 140
Environmental Control 7 60

1000 1000


a) ERDA is not putting enough emphasis on
Conservation and Fossil Energy; proportionately
too much on Solar and Fusion.

b) The recommendation for ERDA to increase relative
emphasis on Environmental Control Technology
represents my view that ERDA has a more balanced
view of the Nation's energy problem than EPA has,
and, therefore, is likely to weigh the need for
specific Control Technology differently from
EPA; if so, ERDA should act accordingly.

2. Allocation among fossil sources

ERDA 1977 B/A

Liquefaction 31 30
High Btu Gasification 19 25
Low Btu Gasification 14 30
Advanced Power Systems 9 40
Direct Combustion 22 30
Advanced Research & Support 15 14
Demonstration Plants 45 59
MHD 16 12

Petroleum and Natural Gas 16 20

In-situ Processes 13 10

200 270


Senator Henry M. Jackson -4- February 27, 1976


a) Main disagreement with ERDA is that they are
spending proportionately too much on MHD; too
little on Gasification generally, especially
Low Btu Gasification, on Advanced Power Systems,
and on Demonstration Plants.

b) The budget still indicates no line item for
integrated low Btu gas-combined cycle systems
even though this was among the recommendations
of the OTA study of the ERDA budget.

c) In fact, electric power generation as such
continues to lack a home of its own; it is
spread through the various divisions.

3. Allocation among solar

ERDA 1977 B/A

Heating and Cooling 19 23
Agricultural and Process Heat 2 2
Solar Electric 42 21
Technology Support & Utilization 2 2
Fuels from Biomass 2 2

67 50


a) ERDA's emphasis on solar electric is much too
high; in fact, in my opinion, the work on ocean
thermal is unwarranted beyond a minimal exploratory
research effort.

b) Major shift should be toward industrial and
residential/commercial use of solar heat.


Senator Henry M. Jackson -5- February 27, 1976

4. Allocation among geothermal

ERDA 1977 B/A

Engineering R&D 5 7
Hydrothermal Technology 5 3
Advanced Technology 5 4
Environmental Control 2 2
Resource Exploration 4 4

21 20


a) Have omitted consideration of loan guarantee
in the ERDA allocation.

b) Main difference is that ERDA should put more
into Engineering R&D, e.g., heat exchangers,
low temperature cycles, somewhat less into
hydrothermal technology.

5. Allocation among nuclear technologies

ERDA 1977 B/A

Magnetic 122 59
Laser 42 21

164 80

Comment: No serious disagreement in relative emphasis.

Fission Power Reactor
LMFBR 275 230
LWR Technology 5 20
Reactor Safety Facilities 14 20
All Other 51 30

345 300


a) Highest priority should be on improving avail-
ability of LWR's and on developing the LMFBR.

b) All Other technologies do not look as needed
or attractive in the medium term.



Senator Henry M. Jackson


February 27, 1976

ERDA 1977 B/A

Nuclear Fuel Cycle
Uranium Resource Assessment
Uranium Enrichment Technology
Nuclear Fuel Cycle
Waste Management



Would give somewhat more emphasis to resource
assessment and waste management, slightly
less to enrichment.

6. Allocation among conservation

ERDA 1977 B/A

Electric Energy Systems and Storage 20

End-Use Conservation
Conversion Efficiency


Would give slightly more emphasis to industry,
transportation, and conversion efficiency.

I appreciate the opportunity to submit these views for
your consideration; I would be happy to offer further comments
or explanations should you wish to have them.


Roland W. Schmitt
Research & Development Manager
Energy Science & Engineering




eSTABusNCD 0sea

WILMINGTON, DELAWARE 19898 February 17, 1976

The Honorable Henry M. Jackson
Chairman, Committee on Interior & Insular Affairs
United States Senate
Washington, D. C. 20510

Dear Senator Jackson:

ERDA's Fiscal Year 1977 Budget

Thank you for your letter of January 30, 1976 to
Donald W. Hallman asking for Du Pont's views on ERDA's FY 1977
budget. Although your letter has been referred to me for reply,
the views expressed below represent the collective thoughts of a
number of people within Du Pont who have expertise and responsibility
in areas covered by the ERDA 1977 budget.

Of all the nation's resources, in our view only coal and
nuclear power have the potential to lessen substantially this country's
future dependence on imported oil. ERDA programs should, there-
fore, accord the highest priorities to research and development of
these two critically important resources. Conservation programs
with potential for achieving significant near-term energy savings
should also have high priority and such programs should emphasize
especially the maximum application and exploitation of existing

Solar, geothermal, and other advanced energy systems
are either very long range or else are unlikely to contribute in a
major way toward solving this nation's energy needs. Consequently,
these programs should be given lower priority consistent with their
stage of development and expected long-range impact.

ERDA programs appear to be in general accord with these
guidelines. However, in our judgement, the emphasis in certain areas
should be modified. While we are unable to apportion specific dollar
amounts to each of the program and sub-program areas, we have


The Honorable Henry M. Jackson -2- February 17, 1976

indicated in Appendix A the way we would suggest apportioning the
total ERDA budget among major program elements.

Finally, Appendix B contains background information in
support of our views on programs concerned with coal, nuclear
energy, and conservation.

Sincerely yours,

M. S. Sadler
Assistant Director




Opinion Survey Response

Major Proqram Areas



Fossil Energy Coal


Solar Energy

Geothermal Energy

Fusion Power Development

Fission Reactor Development

Nuclear Fuel Cycle

Environmental Control Technology

Recommended Allocation
Percent of
ERDA FY-1977 Outlay











68-272 0- 76 5


Opinion Survey Response


Recommended Allocation
Percent of
FY 1977 in Sub-Program


Electric Energy Systems 10
Electric Storage Systems 10
Industry Conservation 11
Buildings Conservation 24
Transportation Conservation 40
Improved Conversion Efficiency 5


Fossil Energy Coal

Liquefaction 10
Gasification High Btu 25
Low Btu 3
Advanced Power Systems 5
Direct Combustion 32
Advanced Research & Supporting Technology 16
Demonstration Plants 5
Magnetohydrodynamics 3
Other Capital Equipment 1


Solar Energy

Direct Thermal Heating & Cooling 60
Agricultural & Process Heat 5
Solar Electric Applications 5
Technology Support & Utilization 10
Fuel from Biomass 20





Du Pont recommends that Federal support of energy research
and development concentrate on coal, nuclear energy, and conservation
of energy. Specific recommendations are based upon the assumptions
that key elements of a national energy policy would be designed to:

Reduce substantially the country's dependence
upon imported oil and thus minimize the danger
to the domestic economy of a sudden interruption
in the flow of imported oil.

Develop alternatives to oil and gas as the major
sources of fuel and feedstock supply.

Develop abundant new sources of energy that can
sustain the traditional growth pattern of the U.S.
economy for decades and comply with requirements
for maintaining acceptable environmental quality.


The use of coal will have to be greatly increased between now
and 2000 to meet the country's needs both for energy and chemicals,
Coal is in greater reserve than any other fossil deposit in the United
States and more technology and knowledge exist for winning and pro-
cessing this basic raw material than for any other of the possible
substitutes for petroleum.

ERDA should continue support of programs on coal which are
categorized as near, mid, and long term to denote the expected timing
for achievement of results that should have significant impact on the
nation's use of energy.

Near-Term (1975 to 1985) Coal Programs

Gasification of Coal

Conversion to High Btu Gas Since the shortage of natural
gas is the most severe energy problem confronting this nation near
term, projects for conversion of coal to high Btu pipeline gas (SNG)
should receive high priority in the next decade. Although technology
in this area has advanced to the stage where large commercial size


plants are now being built, present processes are relatively inef-
ficient and are a long way from being economically competitive
and acceptably efficient from an energy basis. For example, the
first high Btu gas plants to come on stream will be designed to
produce 250 MM cu. ft. of SNG per day and will consume about 20 M
tons of coal per day. Coal produced in the U. S. now supplies
about 20% of the country's energy needs. If all of this coal were
to be converted to SNG by present processes, the gas produced would
supply only about 10% of the nation's requirements.

Clearly, if SNG is to become an important commercial 1
product in the future, processes for its manufacture must be greatly
improved. Therefore, greater emphasis and strong support should be
given to second generation, more sophisticated SNG processes now
under development that are principally based on high temperature,
high pressure, fluidized bed, and multiple reactor technologies.

Conversion to Low Btu Gas Although a variety of processes
for production of low Btu gas are under development, most are modifi-
cations of a process that has long been exploited in the manufacture of
town gas. The principal target of current programs is conversion of
coal to low Btu gas that is free of particulate matter and sulfur
and that accordingly is an environmentally acceptable fuel for gene-
ration of electric power. Successful development of such processes
should provide an attractive alternative to complete combustion of
coal which is plagued with the problems of removing sulfur and fly
ash from stack gas.

Support for worthwhile projects on processes for low Btu
gas should continue and should be augmented with support for engineer-
ing work to demonstrate the practical use of low Btu gas in combined
cycle processes for generating electric power. In such processes,
the hot gas would be fed first to a gas-fired turbine and then to a
conventional steam turbine generator to produce steam. The over-all
system efficiency is expected to be in the neighborhood of 50 60%
which compares with the average of 35% for conventional steam plants.


Mining and Transportation In spite of annual capital
expenditures of more than $500 million since 1970, the coal industry
has little spare production capacity today. The National Coal
Association forecasts that production of coal will have to increase
by about 40% to satisfy projected demands in 1985 for conventional
uses alone and that many billions of new capital must be raised to
achieve this goal. To give some perspective of the impact that
coal gasification would have, about 75 plants of the size now planned
would consume all of the coal currently produced in the U. S. and the
output of these plants would amount to only slightly more than one-
third of the natural gas produced in the United States.

While strip mining is attractive, it is beset by environ-
mental problems and today only about 45% is produced this way.
Furthermore, facilities for transportation of increased volumes of
coal do not exist and presently installed facilities are deteriorat-
ing rapidly. Therefore, even in the absence of new demands for coal
for conversion to fuel and chemicals, the industry faces monumental
problems in expanding production. While these can undoubtedly be
solved, it will require extraordinary measures and concerted action
by Government and industry. This is a problem that clearly cannot
be helped significantly with R&D dollars but can, with strong
leadership and a consistent policy.

Mid-Term Programs (1985 to 2000)

Liquefaction of Coal

Most processes now under development were sponsored in
recent years by the Department of Interior through the Office of Coal
Research and Bureau of Mines in partnership with energy companies and
trade associations. Although fuels are the principal product in all
cases, the output under optimum conditions may contain as much as 20%
petrochemicals that are economically recoverable. Liquids are pro-
duced from coal by one of three general processes pyrolysis, non-
catalytic hydrogenation, and catalytic hydrogenation.

As yet no one process has emerged as superior to the others
and support for all should be continued with the target of selecting
one or two of the most promising for scale-up by 1985. While all
programs in this area are concerned primarily with production of
liquid fuels, a secondary objective in some cases is a clean-burning
solid fuel. These are clearly appropriate goals but Du Pont believes
that such programs should also include evaluation of processes for
producing petrochemicals of value to the chemical industry.



The need for development of an alternative to petroleum
for supply of liquid fuels and chemical feedstocks is of major
economic importance to the country and its chemical industry. The
present coal liquefaction processes are highly inefficient and
uneconomical and the emphasis for some years to come should be on
further development and improvement of these processes and not,
as some have proposed, on early construction of a number of
demonstration plants which would require a large, wasteful invest-


Near Term (1975 to 1985)

The lag time between issuance of a construction permit and
completion of a nuclear power plant is 8 to 10 years. For this
reason, it is most appropriate during the next decade to emphasize
further development and use of the light water reactor (LWR) and to a
lesser extent the high-temperature, gas-cooled reactor (HTGR).

There are two major problem areas impeding expanded use
of these reactors to serve the country's energy needs. These are
concerned with the need for satisfactory commercial demonstrations

Environmentally acceptable methods for
disposing of fission products and plutonium
residues remaining after fuel reprocessing.

Plutonium recycle from spent fuel elements.

Technology for separation of uranium and plutonium from
spent fuels and isolation of waste fission products has been practiced
in Government-owned plants for over 30 years yet there is presently no
commercial facility in operation. The first such facility is scheduled
to go on stream by mid-1976 but environmental and regulatory pressures
threaten to postpone operation until 1978 or even later. A concerted
effort is needed now to overcome these objections and to establish
a viable commercial operation. ERDA's budget indicates that not as
much urgency and importance is being attached to accomplishment of
this task as we in Du Pont believe is warranted.



The same comment applies to commercial demonstration of
recycle of spent fuel element plutonium into fresh fuel. Such a
process will reduce fresh uranium requirements by about 30% and
uranium enrichment investment by about 20%. No technical innova-
tions are required but there remains the task of demonstrating to
nuclear opponents that a commercial facility can operate with ac-
ceptable environmental impact and with adequate safeguards against
diversion of plutonium by terrorist groups. This, too, could prove
to be a critical stumbling block and prompt and aggressive support
by ERDA and others is needed to accomplish the needed demonstration
as soon as possible.

Mid-Term (1985 to 2000)

According to present estimates, the country's uranium
reserves will be depleted around the turn of the century. Thereafter,
continued and expanded use of nuclear power must rely upon successful
development of the breeder reactor or, in the event of failure, of
alternative processes based, for example, on the thorium-233 U cycle
or fusion. Although several types of breeder reactors are under
development, the most advanced, and the choice worldwide, is the
liquid-metal-cooled fast breeder reactor (LMFBR).

Support of development of the LMFBR should be continued
but thorough consideration should also be given to acquisition of
technology from France or other countries that appear to be well
ahead of the United States in the development of this technology.

Du Pont also recommends increased support of such other
breeder types as the high temperature gas and molten salt reactors.
In addition, funds should be provided for work on the thorium cycle as
a backup in event of the possible failure of the breeder.

Long Term (Beyond 2000)

Du Pont agrees with ERDA's proposal to continue the
former AEC work on fusion.


Many conservation measures have little or no technology
content and are being incorporated into our everyday existence. Other
measures based primarily on in-hand technology could be implemented
well within the 1975-85 decade and could result in a significant



reduction of the nation's energy needs and consumption. There is
need to improve these measures and others related tothem through
research, development, and demonstration programs. Five areas
which merit attention are:

more efficient combustion of fuel
capture of energy values from waste
increased energy efficiency in industry
improved building design and retrofit for
energy conservation
more efficient conversion of electric energy
to work

More Efficient Combustion of Fuel

The electric power industry is the largest single con-
sumer of fuels by direct combustion. The industry uses about 20% of
the nation's fossil fuels. Of this total, 58% is coal, 24% is
natural gas, and 18%. is oil. Efficiency of conversion of fuel to
electric power averages about 35% for the entire industry. However,
American Electric Power Company has reported that their newest
generating stations have achieved 50% efficiency by using secondary
recovery through topping turbines.

More effort should be made to control operating conditions
to provide stoichiometric combustion. Available instrumentation could
accomplish this saving by dynamically regulating air flow to accom-
plish complete combustion and minimum loss of heated air up the stack.

Attention to auxiliary uses of the waste low pressure steam
from the turbine-generators is a near-term objective which can lead
to appreciable energy saving. Some generating stations today operate
at an over-all efficiency of 70% conversion because uses have been
found for waste steam.

Recovery of Captured Energy Values from Waste

Government-supported programs on waste have focused
primarily on pollution problems and have tended to overlook the
opportunity for recovery of metals and other solid residues with high
energy content. Much waste contains important components which
would be more valuable if recovered and recycled than if burned.
Simple incineration of bulk waste represents a loss of energy that
might be captured through development of practical separation



Increased Energy Efficiency in Industry

Industry uses about 37% of the nation's fuel, exclusive
of the energy bought from electric power companies and energy used
for transportation. One approach to energy savings is through in-
creased efficiency of current operations. Another approach is to
modify existing operations to reduce energy required. The latter
should be expanded through support of R&D programs on alternatives
to widely used energy-intensive industrial processes. Distillation
is an example. Liquid-liquid extraction or membrane separation might
contribute significant energy savings but the necessary R&D to
establish feasibility is yet to be done.

Improved Building Design for Energy Conservation

Residential and commercial buildings use 36% of the
nation's energy. Of this amount, 70% is accounted for by residential
buildings where 36% of the energy is estimated to be wasted. If this
waste were completely eliminated, 9% of the nation's energy require-
ments would be saved. A Ford Foundation analysis reports that one-
half of this saving is practically realizable by 1985. Project
Independence makes a similar prediction with greater qualification
dependent upon Government actions.

None of the modifications required to achieve these
energy savings are technically sophisticated and there do not appear
to be any insurmountable technical barriers. There is, however, a
need to provide incentives and motivations for consumers.

More Efficient Conversion of Electric Energy to Work

About 25% of the residential energy is used in electrical
appliances. Recent studies at National Bureau of Standards (NBS) have
shown that the electric efficiency of appliances ranges widely and
depends importantly on engineering design. The NBS work has resulted
in a program to use labels that indicate the energy efficiency of the
manufactured product. This program and programs to improve design
efficiencies should be encouraged and extended.




E CAMERQ-]_ .___________
NGINEER 1315 South Clarkson Street. Denver. Colorado 80210 Telephone 303-777-2525 TWX 910-931-2699

February 23, 1976

The Honorable Henry M. Jackson
United States Senate
Washington, D. C. 20510
Dear Senator Jackson:
This is in response to your letter of January 30, 1976 requesting
an assessment of the proposed ERDA budget for FY 1977. My comments will
be limited primarily to the Fossil Energy Program.
ERDA's proposed program and budget for FY 1977 still does not
reflect appropriate emphasis on near-term energy problems. The need for
concentrating on the 1985 period is clearly pointed out in An Analysis
of the ERDA Plan and Program, the Office of Technology Assessment report
of October 1975. Since the review of ERDA-48 last summer by the OTA,
the energy outlook for the near-term has continued to worsen, making it
absolutely essential that ERDA's attention shift to fossil energy programs
that will add significantly to domestic energy supply as soon as possible.
ERDA's proposed Synthetic Fuels Commercialization Demonstration Program
is a step in the right direction but the program is too limited in scope
and, of course, does not yet have congressional authorization.
In support of my contention that our near-term energy outlook
continues to worsen, consider the following:
Nuclear Energy concerns over nuclear safety, citizen initiated
referenda to ban nuclear power plants in 29 states, and continued
cost problems plague the nuclear power program making it most un-
likely that 1985 goals will be met.
Oil In the year following the embargo our domestic oil production
continued its downward trend dropping 443,000 B/D. During 1975 we
lost another 400,000 B/D. The Independent Petroleum Association of
America predicted that 1976 will see another drop of 224,000 B/D
(Oil & Gas Journal, November 3, 1975, page 26). However, with the
roll-back of oil prices mandated by Congress the decline in produc-
tion will be larger. The IPAA also predicted that U.S. oil demand
would increase by 677,000 B/D during 1976 if the economy continues
its recovery from recession.


Honorable Henry M. Jackson 2. February 23, 1976

Also note that Canada, our largest non-OPEC oil supplier (1,000,000
B/D in 1973), has notified us that they will phase out exports to
the United States by 1980. (The Rocky Mountain News of November 6,
1975 reported a decision of the Dominion government to slash exports
to the U. S. in 1976 to a level of 500,000 B/D).

Gas For natural gas, which provides 48% of the energy used by
industry, marketed production declined by 6.8% or 4 billion cubic
feet per day during 1975 (Oil & Gas Journal, January 26, 1976, page
108). Add to this the negative impact of the House-passed natural
gas bill, which if sustained, will accelerate still further an
almost unsolvable problem of gas supply. Already drilling rig
utilization is dropping sharply in traditionally gas-prone petroleum

Coal The coal picture is no brighter. Although U.S. production
finally attained the 600 million ton level for the first time in
1975, the goal of doubling output by 1985 is only a distant and
probably an unattainable dream. Expansion is hampered by continued
restrictions on Federal coal leasing, Sierra Club vs. Morton, pro-
posed Clean Air Act amendments, stagnation in improving transporta-
tion facilities and a cumbersome and unresponsive bureauracy.

Synthetic Fuels During the year following the embargo industry
committed $500 million in lease bonuses for four Federal oil shale
tracts. At least 25 commercial synthetic fuels projects, including
7 oil shale and 15 coal gasification plants, were in some stage of
development. Following negative action by the House of Representatives
on synthetic fuels legislation that would have provided a mechanism
for government to share the extraordinary risk of these pioneer
plants (mostly political risk) almost all of these projects are be-
ing phased-down or moth-balled. Hundreds of technologists with
synfuels experience assembled for these projects are being reassigned.

Most of the scientific manpower of the Federal government with
energy expertise have been centralized in ERDA. Furthermore with its
enormous budget and through its contractual relationships with industry,
and the university community, ERDA controls a significant percentage of
the energy-related scientific and technological capabilities of the
nation. ERDA must avoid any misallocation of these resources since our
trained and experienced manpower is not unlimited. ERDA must carefully
consider the division of effort between the longer term and the more
urgent shorter term needs of the nation.

ERDA's emphasis on coal liquefaction, demonstration plants and in
situ technology in its Fossil Energy Development Program are examples of
questionable allocation of resources. Its gasification programs also
are suspect.


C A M E R 0 N


Honorable Henry M. Jackson 3. February 23, 1976

Coal Liquefaction

ERDA's coal liquefaction programs, including expenditures on demon-
stration plants, are the largest items in the fossil energy budget. Yet
it is doubtful that any of the technology will be ready for commercial
application prior to the 1990's. Perhaps even more important, cost
estimates made by ERDA for the Synthetic Fuels Task Group, indicate that
syncrude from coal will cost almost twice that from oil shale, yet
insignificant funds are proposed to assist oil shale development.

Demonstration Plants

ERDA's demonstration plant program is a questionable concept. To
attempt to scale-up and demonstrate second-generation technology without
first having had experience with first-generation technology is sure to
lead to failures, delays and costs that might be avoidable. Building a
grassroots plant with complete up-stream and down-stream facilities
merely to demonstrate one or two new steps in a processing sequence is
time-consuming and costly to say the least. To invest hundreds of $
millions in non-commercial sized plants makes no sense at all.

What makes more sense to me is to build as quickly as possible an
array of commercial synthetic fuels plants using proven technology.
Then as second-generation processes are developed that show merit, test
those steps needing scale-up experience in the already existing commer-
cial plants. Trained and experienced people would be available as would
up-stream and down-stream facilities and infrastructure. In the meantime
the manpower and money that would go into the demo projects could be
applied to pioneer commercial plants that would add to our oil and gas

Oil Shale

The only ERDA oil shale programs noted in the budget for Fy 1977
are included under IN-SITU TECHNOLOGY. In-situ shale oil production,
despite its hoped-for advantages over the mining approach, is by no
means assured of success. Several major problems relating to environ-
mental hazards, resource recovery and economics must be answered. At
the same time mining and aboveground processing, though much farther
advanced also have unanswered questions in the same categories.

We can afford no further delays in determining the role oil shale
is to play in our near and mid-term energy supply. In the absence of an
assured commercialization program that would include oil shale, both in-
situ and conventional shale oil production methods must have added
emphasis, preferably through cost shared projects with industry. Funding
in the range of $1 billion over the next five years probably will be



Honorable Henry M. Jackson 4. February 23, 1976

Coal Gasification

The research, development and demonstration programs on both high
and low BTU gasification need to be more realistically related to the
entire economic problem of obtaining gas from coal. The conversion of
coal to gas is only one step in the process. Acquiring and developing
the coal and water resource to support a coal gasification project,
mining, transporting and handling the coal, processing the raw gas and
pipelining the gas to market all have significant costs. In addition,
providing solutions to environmental and socio-economic problems are no
small part of the cost of gas from coal and are relatively independent
of the process chosen to convert coal to gas.
In considering the allocation of scarce resources it seems wiser to
me to concentrate on first-generation commercial applications of coal
gasification technology rather than a proliferation of R,D&D projects
whose ultimate economic contribution may be small at best, since the
gasification step may represent no more than 25% of the total cost of
gas from coal.

Synthetic Fuels Commercialization

Finally, I would like to comment on the synthetic fuels commercial-
ization program. It is absolutely essential that government take a
risk-sharing role in establishing this vital industry. There are too
many constraints on private capital to expect that industry will be able
to do the job alone, in time.

In the President's 1975 State of the Union Message he targeted a
goal of 1,000,000 B/D of synfuels production by 1985 (including the oil
equivalent of synthetic gas). The Federal Task Force that studied and
reported on the proposed program came to the conclusion that a 350,000
B/D "information program" was more appropriate and recommended an array
of incentives to attain the scaled-down goal.

In my opinion the focus of the government's effort should avoid
limiting numerical goals. Instead it should aim to remove administra-
tive and economic roadblocks for those who have been trying to get
started and seek to get all qualified entrants under way. Some are
ready to proceed now with pioneer commercial plants based on years of
prior work. Others are on a slower track or are now beginning. All
qualified entities should be encouraged to proceed at the fastest pace
each considers prudent.
If we are to require 5 to 10 million barrels-per-day of synfuels by
the turn of the century, as suggested by Dr Robert Fri in his testimony
to the House Committee on Science and Technology, there is no time to


Honorable Henry M. Jackson

February 23, 1976

lose. We have no possibility of developing a new set of technologies
before proceeding to build such an industry. We must start with what we
now know and apply the ingenuity and skills of a broad spectrum of
industry to improve the technology as we go.

This should be the basic aim of ERDA's synthetic fuels commercializa-
tion program.

I appreciate your invitation to comment on ERDA's program and
budget. If I can be of further assistance feel free to call on me.

Ver ry yo




P. 0. Box 117 / Oak Ridge, Tennessee 37830 / (615) 483-8411

Office of the ODirector February 10, 1976

The Honorable Henry M. Jackson
Committee on Interior and Insular Affairs
United States Senate
Washington, D. C. 20510

Dear Senator Jackson:

Although I have responded to your request for suggested allocations in
the ERDA budget, I believe that I can be more helpful to your committee
by bringing out a number of essential points that our OTA Nuclear Panel
covered in its deliberations:

1. Overall ERDA Budget

The overall energy R&D budget for ERDA for 1977 is $2,413 billion.
This overall budget reflects historical trends in our budgeting for
energy research, notably the $2 billion per year for 10 years pro-
posed by you some three years ago. I believe, as did the OTA panel,
that in view of the urgency of the energy crisis, we should reexamine
our underlying perception of what constitutes an appropriate budget
for energy R&D. I believe an overall budget twice as large as the
present one is by no means out of the question, especially since,
even at $5 billion, the Federal expenditure for energy R&D would be
less than the maximum spent on space at the height of the Apollo

2. Molten Salt Project

The OTA Nuclear Panel urged that the molten salt reactor be funded
at such a level as to allow a determination of its true promise.
Instead, this project has been cancelled. This, I believe, is a
very serious mistake.

3. Siting

There is little in the ERDA program that aims at establishing a
policy for the siting of breeders. As the enclosed letter to Paul
Dragoumis of the Federal Energy Administration suggests, I believe
this is a crucial long-term issue.


Senator Jackson 2 February 10, 1976

4. CO2 Problem

Evidence is beginning to accumulate to suggest that CO2 from burning
of fossil fuel may pose a much more serious hazard than had been
assumed. I would urge increase in the environmental budget of ERDA
so that this matter can be looked into properly.


Alvin M. Weinberg



Alvin M. Weinberg

(1) Based on your participation in the Office of Technology Assessment's
analysis of the ERDA long range plan, how would you allocate $1,000 to the
various major programs in 19777

Conservation...................................................... $ 53
Fossil Energy............................... ....... ..... ... ........ 195
Solar Energy......... ........................ .............. .70
Geothermal Energy................................... 44
Fusion Power Development............................ .............. 88
Fission Reactor Development....................................... 352
Nuclear Fuel Cycle................................................. 154
Environmental Control Technology.................................... 44


Fusion: No change in relative allocation
Fission: Power Reactor Development
Base ..... ............... ......... ................... ...... ... $ 460
CRBR ................................................... ........ 237
Safety ........................................................ 82
Advanced Fuels...................................... ............. 23
LWBR ................................... .................... .. .51
GCR ............................................................ 43
MSBR................................. ......................... 43

LWR ..................................... ....................... 17
Support ........................................................ 31
Capital Equipment ........................................... ... 13
Nuclear Fuel Cycle and Safeguards: No change in relative allocation



December 10, 1975

Dr. Paul Dragoumis
Office of Nuclear Affairs
Federal Energy Administration
12th and Pennsylvania Avenues
Room 1109
Washington, D. C. 20461

Dear Dr. Dragoumis:

I am writing to call to your attention what I consider to be one of
the most important long-term policy questions affecting the nuclear
option the siting of breeder reactors. Briefly put, we must decide
whether the basic policy for siting breeder reactors shall be a continu-
ation of present reactor siting policy; or whether all breeders ought to
be confined to nuclear parks.

As you probably know, when John Sawhill was Administrator of FEA he
delivered a speech in which he all but s.sqgested that all reactors
deployed after 1990 be confined to nuclear parks. Since at the time
It was a fair presumption that reactors after 19t3 would be breeders,
Sawhill's suggestion was tantamount to confining breeders to central
sites. With reactors being delayed, it is not so clear any more that
after 1390 all reactors will be breeders. Nevertheless, I believe it
Is extremely Important to reach some breeder siting policy fairly
soon so that the decision will not be pre-empted by inertia.

A decision to confine all breeders to nuclear parks Is not one that
can or should be made lightly: however the decision goes, It will
have extremely far-reaching consequences, especially If nuclear breeders
turn out to be the main long-termi source of central electricity. I
should therefore expect the matter ought to be the subject of a major
study, of the same sort as NRC conducted for LWR's. The actual formu-
lation of such a far-reaching policy seems to me to fall In the province
of FEA, or even the Energy Resources Council, rather than I.RC; I would
think the study should be sponsored by FEA, or possibly Jointly by FEA,
NRC, and ERDA.


Dr. Dragoumis

I would like very
your convenience.
gather with you?
us In Oak Ridge.
would be possible
at our Institute,


December 10, 1975

much to discuss this and related matters with you at
Could your office let me know when we could get to-
Another possibility would be to invite you to visit
We could then talk In a more leisurely fashion than
in Washington and you could, on the same day you are
talk to people at Oak Ridge National Laboratory.


AL\.\v : W. ..;3--R.%
Alvin H. Weinberg


bc: Chester L. Cooper, IEA-ORAU, Washington, D. C.
Calvin C, Burwell, Oak Ridge National Laboratory
Ernest G. Silver, lEA



(1) Based on your participation in the Office of
Technology Assesment's -analysis of the ERDA long range plan,
how would you allocate $1,000 to the various major programs in 1977?

Conservation 50 45

Fossil Energy 250 220 see over

Solar Energy 30 58

Geothermal Energy 20 25

Fusion Power Development 100 151

Fission Reactor 300 353

Nuclear Fuel Cycle 200 140

Environmental Control 50* 8
Stack gas cleanup 1000 1000
(2) How would you allocate $1,000 to the sub-programs
in one or more of the program areas with which you are familiar?
For example, the sub-programs in the Conservation Program are
listed on page 4 of the statistical highlight booklet as follows:


Electric Energy Systems

Energy Storage Systems

Industry Conservation

Buildings Conservation

Transportation energy

Improved Conversion

(3) Please provide any comments or suggestions you
might have regarding the proposed 1977 budget. Of special
interest are opinions reached by your panel regarding the
long range plans, that are not reflected in next year's budget.

1. The U-.&. R & D budget is woefully soro-n eff0_otsto
resolve the crucial nearterm, stackgas clean-up problem. It should be pursued
(by EPA and ERDA) by simultaneous testing (at 100 MW scale) of 3-4 second
---- -' atrt4 1rr Pt em.-'C..' *u- ri. r L l lptc -u .' w l - h v piv-
in cost and timing for large, baseload, coalburning power plants.

2. The '77 capital budget (P. 19, Major Construction Budget,
Statistical Highlights) is $47.3 million for 3 Demonstration plants to cover
CMALCON, 1 Hi BTU, 1 lo BTU project. I believe this amount is inadequate if
these projects (particularly the gas job) are to be pursued at least through
Phase I on a multiple basis. This must be done to assure proper process
In general, the liquefaction program has been: too large
(plant size), too narrow (not enough alternates), too soon (not ready for Dewo).
The gasification program: Tloo far out."


February 6, 1976 i1UJ

Solar Energy Applications Laboratory

Colorado State University
Fort Collins, Colorado

Senator Henry M. Jackson, Chairman
Committee on Interior and Insular Affairs
United States Senate
Washington, D.C. 20510


Dear Senator Jackson:

I am pleased to answer your invitation of 30 January, to comment
on the ERDA 1977 budget. I hope my recommendations and comments will
be useful to your committee.

Sincerely yours,

George O.G. Ld




(1) Based on your participation in the Office of
Technology Assesment's 'analysis of the ERDA long range plan,
how would you allocate $1,000 to the various major programs in 1977?


Conservation 90

Fossil Energy 200

Solar Energy 90

Geothermal Energy 40

Fusion Power Development 150

Fission Reactor
Development 300

Nuclear Fuel Cycle 100n

Environmental Control
Technology 30

(2) How would you allocate $1,000 to the sub-programs
in one or more of the program areas with which you are familiar?
For example, the sub-programs in the Conservation Program are
listed on page 4 of the statistical highlight booklet as follows:


Electric Energy Systems I agree with the proposed
budget in Conservation
Energy Storage Systems Research and Development

Industry Conservation

Buildings Conservation

Transportation energy

Improved Conversion

(3) Please provide any comments or suggestions you
might have regarding the proposed 1977 budget. Of special
interest are opinions reached by your panel regarding the
long range plans, that are not reflected in next year's budget.
Solar Energy Development Sub-Program
Heating and Cooling 500
Agricultural & Process Heat 50
Solar Electric Applications 350
Technology Support & Utilization 50
Fuel from Biomass 50


Comments: In major programs, fission, fusion, and nuclear fuel cycle are
grossly overfunded, and all other energies are underfunded. My recommendations
are based on this view.
In solar programs, low temperature heat for buildings and industry is
far more important and has much greater potential than electric power production
for several decades. The proposed funding is seriously unbalanced and fails to
recognize these facts. The above recommendations will provide ample research
funds for electric power investigations and will accelerate the near-term
application of economical solar heating and cooling.



(1) Based on your participation in the Office of
Technology Assesment's-analysis of the ERDA long range plan,
how would you allocate $1,000 to the various major programs in 1977?


Conservation #SO

Fossil Energy U0

Solar Energy 0u

Geothermal Energy

Fusion Power Development 100

Fission Reactor

Nuclear Fuel Cycle I-

Environmental Control

(2) How would you allocate $1,000 to the sub-programs
in one or more of the program areas with which you are familiar?
For example, the sub-programs in the Conservation Program are
listed on page 4 of the statistical highlight booklet as follows:


Electric Energy Systems 1%-T IH'
Energy Storage Systems A

Industry Conservation 5CtE1- (.EL-TA 6 00

Buildings Conservation JTCFUP,(-L L 7 Cc)0<

Transportation energy o {- '

ITmproved Conversion

(3) Please provide any comments or suggestions you
might have regarding the proposed 1977 budget. Of special
interest are opinions reached by your panel regarding the
long range plans, that are not reflected in next year's budget.

IT iu PJJWu^TI^ I -T v-jF tip'T LVW T^- _
y9Nr<-Err--L ffe~rLLC.JLZPc1 E)C-tt O,-j Sp^cf -44/ri^>

(?,vZ 7 T T L 7~p IA/ P- 1b c ffrEc 7 (-


Reply To: Olin Brass
Olin Corporation
East Alton, Illinois 62024

February 10, 1976

Honorable Henry M. Jackson
United States Senate
Committee on Interior and Insular Affairs
Russell Senate Office Building Room 137
Washington, D.C. 20510

Dear Senator Jackson:

This will reply to your letter of January 30 requesting com-
ments on the Energy Research and Development Administration's FY-1977

As a representative of the Solar Energy Industries Associa-
tion, I have been called on by Congressmanii McCormack's House Subcom-
mittee to testify February 19 on the same subject. Unfortunately,
the full text of my written testimony has not yet been completed.
Copies will be sent you when they are ready.

With respect to the questionnaire attached to your letter,
we do not feel particularly competent to comment upon portions of the
E.R.D.A. budget relating to areas other than solar. The table attached
contains our detailed recommendations for changes in the E.R.D.A. solar

The explanation of these recommendations is incorporated in
the attached paper which is a portion of the testimony to be presented
February 19.

Very truly yours,

S. H. BUTT, President
Solar Energy Industries Association

cc/Mr. John H. Blake III
Solar Energy Industries Association
1001 Connecticut Avenue, N.W.
Washington, D.C. 20036



Heating and Cooling of Buildings

The basic philosophy of E.R.D.A. 's program is that improved
solar systems and components must first be developed. Following this,
their technical and economic performance must be demonstrated and evalu-
ated. Then, and only then, will broad efforts to commercialize them be
undertaken. This is a "sequential concept." The Federal Energy Adminis-
tration has proposed a quite different concept in which commercialization
and continuing development are carried out concurrently. This "concur-
rent concept" is the concept favored by the Solar Energy Industries

Solar hardware does exist today, it is available in the market-
place, it is being marketed and installed today. This hardware is serv-
iceable and cost-effective. This has occurred within the past year.
This fact makes it possible to adopt the concurrent concept.

A program structured to support concurrent commercialization
and continuing product development offers many advantages. Among these

1. Government efforts to assist commercial market development
through the E.R.D.A. program, as well as through proposed user incentives
and the proposed Government buildings program, will lead industry to
accelerate their own privately funded research and development activities
aimed at developing new products and improving existing products. In the
long run, acceleration of industry funded research and development will
reduce the cumulative cost of the research and development programs to be
funded by the Government and ultimately largely replace Government funded
research and development.

2. Accelerated market development will accelerate the develop-
ment of the industry infrastructure required to support a large-scale com-
mercial industry. The rate at which this infrastructure can be developed
is one of the key constraints which limited the rate at which solar direct
thermal applications can enter service and therefore, the rate at which
they can make an effective contribution to the energy problem.

We have examined E.R.D.A. 's direct solar thermal programs from
the point of view of two questions: What must be done to change them so
that they are supportive of concurrent market and product development?
What must be done to better adapt E.R.D.A.'s research and development
programs to the realities of industry and market requirements? (E.R.D.A.
and other agencies may now not correctly perceive industry and market re-

Let us begin with the demonstration program mandated by Public
Law 93-409.


In the context of the "sequential concept," the primary objec-
tive of the demonstration program would be defined as achieving technical
success only. Effectively, this means proving that the systems will
function technically and may be projected to be cost-effective in a
variety of operating conditions represented by a number of climatic areas.

The "concurrent concept" demands that market development be the
major thrust. Market development objectives require that the demonstra-
tion program encourage potential users--individual homeowners, builders,
developers, owners of apartment buildings, builders and owners of com-
mercial and industrial buildings, architects and engineers--to accept
solar installations as a technically and economically viable energy
source and to individually decide to utilize this source.

One very obvious difference between these two concepts of the
purpose of demonstration is the number and location of the demonstra-
tion installations. To illustrate this point, we may note that climat-
ically, Kansas City, St. Louis, Indianapolis, Louisville and Cincinnati
are very similar. If the purpose of the program is only to demonstrate
that a solar heating system is technically viable in any of these areas,
we agree that demonstration in only one is required. To obtain operat-
ing data to be used in general economic analysis, demonstration in only
one of the metropolitan areas is also needed. To the extent that moder-
ate climatic differences exist between the five areas, results from one
can be adjusted to suit each of the others using available climatic data.
However, if the purpose is market development, there must be adequate
demonstration in all five areas. The bulk of the "public" which a mar-
ket development oriented demonstration progrc.1i must reach in each area
will simply not travel long distances to inspect a demonstration instal-
lation. The question of whether or not the demonstration program is in-
tended to have market development as one major objective is at the root
of the continuing controversy concerning the number of demonstrations
which are needed.

Another equally important difference between the two concepts
is that, in the case ox the sequential concept, "demonstrations" may be
looked upon as the final step in development. In mny cases, E.R.D.A.
and N.A.S.A. now propose that the systems demonstrated will be the pro-
tntypes delivered at the conclusion of a development program. This
implies that demonstration installations are to be regarded as a "test

We do not disagree that field test of systems and components
developed as a result of Government funded product development programs
is desirable and necessary. It is normal practice in the private sector
for manufacturers planning to market a new product to field test it first.
We are not in any way opposed to field testing as a part of "Development
in Support of Demonstration." However, "field test" is not a proper part
of public demonstration. Market development oriented demonstration re-
quires that the systems demonstrated be those which have already been


found to be technically and economically viable either as a result of
Government field testing, as a result of field testing in the private
sector or, perhaps best, as a result of successful commercial instal-
lation in the private sector.

The basic reason for this difference is that public market
development demonstration must avoid either technical or economic fail-
ure. The E.R.D.A.-N.A.S.A. program tends to confuse the difference
between "Field Test" and "Public Demonstration." The reason for this
confusion seems to be that the market development function of the demon-
stration program itself is not too well recognized. Unfortunately,
failure to recognize the market development function and failure to
recognize what is required for market development in a diffuse market
is most evident in N.A.S.A. activities.

We have recommended previously that definitive market research
studies be undertaken to define the number of demonstrations required
during the time span of Public Law 93-409 to achieve adequate market
development results. I have not seen the results of any such studies
and indeed, do not at this moment know whether or not such studies have
even been started. As a first approximation, I suggest that there are
approximately fifty market areas in which market development demonstra-
tion should be conducted. (In some cases, because of the geographical
size of some of the larger metropolitan areas, there is more than one
market area within a metropolitan area.) I believe that, in order to
demonstrate adequately in each, no less than sixty residential instal-
lations are required over the five year period in each of the fifty
market areas. In the aggregate, this means 3,000 installations over
five years. My reasons follow:

1. There is a requirement to successively demonstrate "im-
proved models" year by year as industry and/or Government development
programs produce results.

2. There is considerable diversity in the residential struc-
tures upon which solar installations are to be demonstrated. Three
single-family residences of different characteristics and one multiple
family dwelling should be included in a "normal" year's program for each
general type of system to be demonstrated.

3. There are a number of generically different types of sys-
tems including: liquid heat transfer systems, air systems, heat pump
assisted systems, etc.

4. Finally, in some measure, application to retrofit as well
as to new structures must be demonstrated.

A Five Year Program with four building types and four generic
types of systems for each building type and demonstration in both new
construction and retrofit would total 160 units in each market area over
the life of the program (5 x 4 x 4 x 2). However, suitable systems for


all applications will not be available during the earlier years and in
some cases, a single demonstration may serve more than one purpose.
Recognizing these factors, I have somewhat arbitrarily cut the total per
market area to sixty.

Residential Demonstrations:

Fiscal Year 1977 is the second year of the demonstration pro-
gram. Fiscal Year 1976 is scheduled to provide only 110 residential
demonstrations, leaving 2,890 for the final four years. Fiscal Year
1977 can be looked-at as still being a "build up" year and installation
of one-fourth of the remaining 2,890 units would be excessive in Fiscal
Year 1977. We recommend that the objective for Fiscal Year 1977 be in-
creased from 200 demonstrations, as now called for in the E.R.D.A. Budget,
to 500. Based upon E.R.D.A.'s statement that an additional $2,300,000
in FY-1977 is required to finance an additional 90 demonstrations over
those provided for in FY-1976, the increase in funding works out at
$7,800,000. This is probably an "outside" figure. For one thing, the
present E.R.D.A. budget provides that half of the 200 demonstration in-
stallations to be made in FY-1977 be fully instrumented. It is our general
understanding that instrumentation costs are greater than the balance of
the installation cost. We would question the necessity of instrumenting
250 out of 500. Additionally, some economy of scale should derive from
increased program size. Recognizing these factors, we propose that the
demonstration program budget for residential demonstrations be increased
by $5,.000,000 and that E.R.D.A. be asked to commit to make a total of 500
demonstrations with a total budget of $11,300,000.

Commercial Demonstrations:

The budget for commercial demonstrations requested in FY-1977
is very nearly the same (actually, slightly lower) than the FY-1976 bud-
get. The E.R.D.A. proposal explains that the level of "demonstration"
planned in 1977 "is the minimum level to ensure the technical achievement
of the program objectives within the schedule constraints required by the
Solar Heating and Cooling Demonstration Act." This statement recognizes
technical objectives only. We propose that market development demonstra-
tions be added. We propose a total of fifty "market development" commer-
cial demonstrations distributed among 25 metropolitan areas. On the
basis of E.R.D.A.'s current proposal, it appears that a total of 68 com-
mercial demonstrations are covered by FY-1976, the transition quarter,
and FY-1977. This implies an average cost of $400,000. We propose that
the additional market development demonstrations in the commercial area
be of a "cost-sharing" nature in which the owner of the structure will be
expected to provide 50% of the cost of the installation exclusive of in-
strumentation. Upon this basis and recognizing that the market develop-
ment installations will be somewhat more standardized than the generally
"one of a kind" technical demonstrations provided for in the present pro-
gram, we believe that E.R.D.A. should commit to 50 commercial market
development demonstrations (in addition to their basic program) in FY-1977
at a total additional cost to the Government of $7,500,000.

Water Heater Market Development:

For a variety of reasons, solar water heaters today are '"most
ready" for market development. We propose a concentrated two year mar-
ket development oriented solar water heater demonstration program begin-
ning in FY-1977. We recommend an average of 100 single family water
heater market development demonstration installations in each of fifty
market areas and an average of ten multi-family water heater demonstra-
tions in each of 25 metropolitan areas. We recommend further that these
market development demonstration installations be on a cost-sharing
basis with at least 257. of the cost being borne by others than the Fed-
eral Government. We recommend that at least 507. of these installations
be coordinated with utilities, both electric and gas, and that at least
in these cases, the control systems provided with the water heaters be
such that the water heater's energy storage capability is used to best
advantage to provide utility load management functions. We estimate
that, upon this basis, the objectives would require a Federal expendi-
ture of $6,875,000 in FY-1977.

The total of the increases recommended in the demonstration
program is $19,375,000.

Research and Development:

Funding for research and development is requested in FY-1977
at a level of $8,200,000. The explanation provided by E.R.D.A. indi-
cates to us that this funding is adequate and program concepts sound.

Development in Support of Demonstration:

Funding requested by E.R.D.A. for Development in Support of
Demonstration in FY-1977 is $7,800,000. The explanation provided by
E.R.D.A. indicates to us that this funding is adequate.


E.R.D.A. requests $2,500,000 in FY-1977 for agricultural and
industrial process heat applications. We recognize that, in general,
efforts in this area are truly still in the developmental stage and the
program recommended by E.R.D.A. appears appropriate.

Thus, our recommendations for the Direct Thermal Application
Program in the aggregate increase the FY-1977 budget from the requested
level of $37,000,000 to $56,375,000.


We accept E.R.D.A.'s estimates of $1,300,000 for solar energy
resource assessment and of $1,000,000 for the Solar Energy Research In-


We have recommended reorientation of Direct Thermal Applica-
tion Programs to add substantial market development activity. Coinci-
dent with this, there is need for a substantial increase in activity
and funding in the area of "Technology Utilization and Information
Dissemination." It is our judgment that the $700,000 requested is
totally inadequate when the market development mission is recognized.
We recommend that general funding be increased to $2,000,000 from the
$700,000 presently requested. We recommend that much of the increase
be directed towards instructional programs at the local level.

As a further support to training and familiarization efforts,
we recommend that at least fifty demonstration-instructional solar in-
stallations be made in universities and community colleges. The train-
ing of architects, engineers and technicians in "solar technology" is
a necessary part of development of an industry infrastructure. Instal-
lations should be generally of residential demonstration size but should
be fully instrumented and specially designed to accommodate modification
as the state of the art advances. Cost-sharing with the university or
college should be sought wherever feasible. Upon this basis, we project
an average cost of $40,000 for each of the fifty installations or a total
cost of $2,000,000.


Solar Thermal Electric Conversion

The budget request for solar thermal electric conversion has
been increased by 150% to $26,500,000.

We question the wisdom of the increase from $750,000 to
$4,750,000 in funds requested for development of "advanced distributed
collector concepts." Earlier in E.R.D.A.'s narrative, the statement
is made, "Studies in FY-1975 identified the central receiver concept
as having a greater potential for economic viability as compared to
distributor collector concepts." Certainly, this is a conclusion with
which we must agree, particularly so when one considers the difficul-
ties inherent in moving collected heat economically and without exces-
sive loss from a large area of distributed collectors to a central point.
This difficulty is a fundamental shortcoming of the distributed collec-
tor concept as compared to the central receiver concept. We must also
note that the efficiency of the water-steam cycle employed to convert
thermal energy into electric energy depends upon initial steam tempera-
tures and pressures being quite high. As a generality, the same com-
ment applies to other liquid-vapor systems. The difficulty and cost of
collecting heat from a dispersed source, such as a large field of dis-
tributed collectors, must logically increase greatly with increases in
temperature and pressure employed. Therefore, it is recommended that
the budget request for distributed collector studies be held at the
level of $750,000, a reduction of $4,000,000.



We suggest that preliminary studies be undertaken in conjunc-
tion with the solar thermal electric program of the concept of the use
of large-scale solar energy collection to drive large-scale desalina-
tion apparatus. In years past, considerable progress was made upon the
development of efficient and relatively cost-effective large-scale de-
salination apparatus by the Office of Saline Water of the Department of
the Interior. (Much excellent work in this area was performed at
E.R.D.A.'s Oak Ridge Laboratory.)

At least superficially, the application seems to be well suited
to solar use. Temperatures required to drive desalination equipment are
quite moderate. Heat necessary to maintain operations overnight can be
stored as unpressurized heated water if some modest sacrifice of desalt-
ing plant efficiency can be accepted and even if no compromise is made
with efficiency, the maximum temperature requirement for the heated brine
in desalination equipment is only 250F, implying only modest pressuriza-
tion of overnight storage. There is no compelling need for continuous
operation during prolonged cloudy periods. With moderate energy storage,
it is believed that a solar powered desalination plant could be operated
quite efficiently without the use of auxiliary energy resources.

In general, the potential requirement for desalted water is in
low rainfall areas in which cloud cover is an infrequent problem and in
which ambient temperatures are generally relatively high, both factors
which would tend to improve efficiency of the solar heat source for a
desalination pi int.

We understand that one of the institutional impediments to
accelerated exploitation of western coal resources and to exploitation
of shale oil resources is the problem of water availability throughout
the Mountain States. A conflict which exists between the existing claim-
ants for the available water for use in irrigation and "new" claims
developing as a result of proposed shale oil and western coal exploita-
tion. In addition, we recognize that, in the Mountain States and in the
Southwest, there is considerable potentially productive land available
which would become productive if water were available. At present, much
water originating in the Mountain States or elsewhere in the Southwest,
principally that flowing into the Colorado River and its tributaries, is
"exported" to Southern California. Presumably, this water could be di-
verted to use nearer to its origin so as to resolve some of the problems
of water availability in the Mountain States and in the nearer Southwest
if its use in coastal regions could be replaced by desalted water.

A conceptual study is recommended. It would initially involve
evaluation of the previously developed desalination technology in con-
junction with the large-scale thermal collection technology now being
developed in this portion of the solar program. The cost of an initial
conceptual study should be modest, $500,000 in FY-1977.



We are in agreement with the program proposals and funding
proposed in the area of photovoltaic energy conversion.


We are in agreement with the programs and funding proposed
for wind energy to electricity conversion systems.

We suggest that studies to define and prepare initial con-
ceptual studies of the extended use of wind energy in nonelectric gen-
eration applications be initiated. An example might be the provision
of pumping power to primary irrigation aqueduct systems. Hypothetically,
in such an application, the interruptible nature of the wind energy
would not necessarily present a severe problem since energy could be
"stored" to assure continuous flow in the aqueduct by pumping into ele-
vated reservoirs. A budget provision of $1,000,000 is recommended for
this purpose.


We have problems in accepting E.R.D.A. 's proposals for pro-
grams and funding in this area. The thermal gradients available even
in the most advantageous ocean areas are quite modest.

The low temperature differentials available in ocean thermal
gradients dictate that conversion of heat to electric energy in this
manner is, at best, relatively inefficient. Low basic efficiency means
that large amounts of heat must be transferred per unit of electrical
energy generated. The further requirement that temperature differen-
tials across heat exchangers must be minimized dictates that heat ex-
change surface area per unit of heat transferred must be relatively

The existing technology for heat transfer to and from sea-
water has been developed over an extended period of years and such heat
exchangers have been in large volume use for many years.

It is our belief that, unless the cost-effectiveness of the
present state of the art seawater heat exchange technology can be very
greatly improved without sacrifice of reliability, there is little hope
that a closed Rankine cycle ocean thermal energy conversion plant can
be cost-effective.

It is evident that much of the ocean thermal work programmed
during FY-1977 can have calidity only if the heat exchanger cost-
effectiveness questions can be resolved. The history of seawater heat
exchanger technology suggests that risks are high and chances of success


It is recommended that general continuing work in ocean ther-
mal energy conversion be held at a quite low level and/or delayed pend-
ing resolution of the heat exchanger issue. An exception to this is
the exploratory development of promising power cycle options which may
be substantially more efficient in the conversion of heat energy at low
thermal gradients into electric power than a closed Rankine cycle system.

It is suggested that a total budget for ocean thermal energy
conversion of $3 500,000 should be adequate or more than adequate to
support heat exchanger research and development, exploratory develop-
ment of promising power cycle options and long lead time corrosion
testing activities.


Solar Energy Program Budget Recommendations,
(Dollars in Thousands)_

(Outlay Basis)

1. Heating & Cooling of Buildings
Recommended Changes
a. Additional Res. Demos.
b. Additional Comm'l. Demos.
c. Water Heater Program

Agricultural & Process Heat

2. Technology Support & Utilizations
a.. Solar Energy Resource
b. S.E.R.I.
c. Technology utilization and
information dissemination,
basic college and univer-
sity teaching & demo. in-
d. Solar storage

. Sub-Total

3. Solar

Electric Applications
Solar Thermal Electric
1. Reduce distributed
collector effort
ii. Conceptual study,
solar desalination





$ 900




$ 4,600



$ 34,500

$ 34,500

_ 2,500
$ 37,000

$ 1,300


$ 34,500

+ 5,000
+ 7,500
+ 6,875
$ 53,875

2 500

$ 1,300




$ 3,000

$ 26,500

$ 26,500




$ 6,300

$ 26,500

+ 500

$ 23,000



b. Photovoltaic Energy

c. Wind Energy Conversion
i. Studies of nonelectric

d. Ocean Thermal Energy
i. Reduce effort except in
heat exchangers, long
lead time testing and
non-Rankine cycle devel-

Sub-Total, Solar Electric

4. Fuels from Biomass






$ 6,000

$ 6.000


$ 3,830



$ 22,000


$ 12,000

$ 7,000

$ 7.000

$ 67.500

$ 3,000



$ 22,000


+ _1,000
$ 13,000

$ 7,000


$ 3.500

$ 61..500

$ 3,000



We do not feel that we are competent to recommend which pro-
grams in the non-solar area might be reduced to provide the $16,675,000
increase in the solar program called for above. Indeed, we are not in
a position to determine whether or not funding for any other program
should be reduced or the $16,675,000 increase in the solar program made
as i net addition to E.R.D.A.'s total program.



OCommonwealth Edison
One First Nalional Plaza Chicago. Illinois
Address Reply to Post Office Box 767
Chicago. Illinois 60690

February 10, 1976

Hon. Henry M. Jackson
Chairman, Committee on Interior
and Insular Affairs
United States Senate
Washington, D.C. 20510
Dear Senator Jackson:
Thank you for the opportunity to comment on ERDA's
FY '77 budget request.
As a participant in the Office of Technology Assess-
ment evaluation, I had the opportunity to review, in detail, ERDA's
long range energy research and development plan. Overall, I was
impressed with its responsiveness to the nation's energy needs,
and with the depth of understanding shown by ERDA's management
in justifying the budget.

In reviewing ERDA's program, it is important to recognize
that in our industry, the Electric Power Research Institute directs
its principal efforts toward near term research and development
needs, while ERDA is concerned with needs for the longer pull.
Taken together, these two programs go a long way toward satis-
fying a large spectrum of the research and development requirements
of the utility industry. Nevertheless, there is an urgent need to
proceed with a number of large scale, albeit expensive, pilot plant
demonstrations. This must be done at a more rapid pace than the
private sector can justify. To this end, allocation of additional
funds to such pilot plant facilities would help accelerate tech-
nology development to relieve shortages of oil and natural gas,
and therefore would have lasting benefits for the nation's

For example, there are several technologies which are
far enough advanced to warrant large scale pilot plant demonstration.
These include technology for producing liquid fuels from coal,
synthetic natural gas from coal, and low BTu gas for combined
cycle electric power generation. It is important to recognize
that such plants are experimental, and not competitive at today's
prices for oil and natural gas. Therefore, it is unrealistic to
expect the private sector to take sole responsibility for such
demonstrations, for a number of reasons. One is that the financial
risks far outweigh the prospects for offsetting economic benefit.
Therefore, when national objectives call for acceleration in the
development of these technologies, federal government assistance
is justified. Such assistance may also be necessary to help
establish new industries to supply and service these technologies
on a competitive basis.


Hon. Henry M. Jackson 2 February 10, 1976

It seems to me that further funding of research and
development on new oil and natural gas extraction technology
promises early benefit for the consumer because it could relieve
shortages of transportation fuels. Also, the OTA panel on which
I served was very much impressed with the urgency for an early
demonstration of the preferred technology for permanent high
level radioactive waste disposal. This should go a long way
toward relieving public concern over this problem. It is an
essential step toward the objective of recycling nuclear fuel
on a commercially viable basis.

Finally, I believe the level of funding in ERDA's FY '77
budget for solar energy and conservation is more than adequate.
Near term developments in conservation have the potential for
some reduction in the growth of oil and natural gas consumption.
However, the greatest gains in this area will come from phasing
out obsolete, inefficient facilities. The prospects for im-
mediate major gains in solar power technology are not bright,
despite recent increases in funding levels. Unfortunately,
major breakthroughs in photo voltaic conversion and energy
storage are needed before solar power can have a significant
impact on the overall energy supply and demand balance. It is
unlikely that these breakthroughs can be advanced significantly
by spending more money on research and development at this time.

I hope my comments are responsive. Enclosed are the
answers to specific questions you raised in the survey. Please
let me know if you have any further questions.


GRa M. Lunde eff
General Staff/gineer



(1) Based on your participation in the Office of
Technology Assesmnent's 'analysis of the ERDA long range plan,
how would you allocate $1,000 to the various major programs in 1977?


Conservation $ 30

Fossil Energy 220

Solar Energy 50

Geothermal Energy 40

Fusion Power Development 160

Fission Reactor 540

Nuclear Fuel Cycle 150

Environmental Control 10
TOTAL $1,000

(2) How would you allocate $1,000 to the sub-programs
in one or more of the program areas with which you are familiar?
For example, the sub-programs in the Conservation Program are
listed on page 4 of the statistical highlight booklet as follows:


Electric Energy Systems

Energy Storage Systems

Industry Conservation

Buildings Conservation

Transportation energy

Improved Conversion

(3) Please provide any comments or suggestions you
might have regarding the proposed 1977 budget. Of special
interest are opinions reached by your panel regarding the
long range plans, that are not reflected in next year's budget.



Coal Liquifaction $150
High BTU 90
Low BTU 65
Advanced Power Systems 42
Direct Combustion 97
Advanced Research and Supporting Technology 69
Demonstration Plants 285
Magnetohydrodynamics 55
Other Capital Equipment -

Petroleum and Natural Gas

Gas and Oil Extraction 85
Supporting Research 5
Other Capital Equipment

In-Situ Technology

Oil Shale 40
In-Situ Coal Gasification 15
Supporting Research 2
Other Capital Equipment ---
TOTAL $1,000




TELEPHONE: (714) 453-2000 Ext. 1338

February 5, 1976

Honorable Henry M. Jackson, Chairman
Senate Committee on Interior and
Insular Affairs
United States Senate
Washington, D.C. 20510

Dear Senator Jackson:

Enclosed you will find my response to the Opinion Survey you sent to me.

With regard to item (1), I would view attainment of the following funding
distribution by 1979 as a desirable ERDA objective: nuclear energy (including
fission and fusion reactors and the nuclear fuel cycle), 40%; advanced fossil-fuel
technologies and waste utilization, 25%; advanced non-fossil-fuel technologies
(including energy production from plants, solar heating and cooling, photovoltaic
power generation, OTEC, hydrothermal energy, dry geothermal energy, etc.),
20%; conservation, 10%; environmental control technology, 5%.

The members of the OTA Environment and Health Panel view the present
ERDA commitment to environmental and health research as inadequate and have
emphasized in particular the absence of a significant implementation program
relating the development of new energy technologies to socio-political constraints.
Multiple resource requirements associated with competition for scarce materials
(e. g., water in the arid West) have received insufficient attention in the context
of integrated regional development plans. Long-term constraints on the develop-
ment of new energy technologies associated with climatic changes produced by
heat addition and pollutant production require early identification since they may
influence decisions concerning a reasonable balance between such complementary
activities as the production of biomass and coal utilization.


Honorable Henry M. Jackson
Page Z

February 5, 1976

I shall be happy to provide you with additional information.

Sincerely yours,

S. S. Penner
Professor of Engineering Physics & Director, Energy Center
Chairman, OTA Panel on Environment and Health


p. s. Under separate cover, I am sending you copies of the first two volumes of
our energy books, which may be useful to you in your work.



(1) Based on your participation in the Office of
analysis of the ERDA long range plan, how would you
various major programs in 1977?



Fossil Energy Advanced2

Solar Energy

Technology Assessment's
allocate $1,000 to the





{ 50

Geothermal Energy

Fusion Power Development

Fission Reactor Development

Nuclear Fuel Cycle

Environmental Control Technology

- Loans
- RD&D

- Loans
- RD&D


263 500



ICoal gasification, coal mining, off-shore drilling, etc.
ZIn situ shale-oil recovery and coal gasification, MHD,
secondary and tertiary oil recovery, gas stimulation, etc.

(2) How would you allocate $1, 000 to the sub-programs in one or more of
the program areas with which you are familiar? For ex-. a1pt, -ti. e sub-prograi.s
in the-6 Cfte*r.Catio Program arc li.tcd on pnage-4-othe-statistica---ghl.ightbo t
a-e O.rW


Health Studies

Biological Studies

Environmental Studies

Physical and Technological Studies

Analysis and Assessment

SEducation and Training



* 200



(3) See attached letter.


Washington, D.C., January 26, 1976.
DEAR : Last summer, you participated in an evaluation of a
long range plan proposed by the Energy Research and Development
Administration. This experience has provided you with a unique van-
tage point from which to assess the proposed spending by ERDA in
the coming fiscal year.
It would be helpful to us in considering ERDA's budget request to
have your answers to the questions on the attached sheet. Your ans-
wers could be used to identify areas that require further investigation
on our part during budget hearings.
Enclosed are two booklets which present ERDA's 1977 budget in
reasonable detail. Page 3 of the statistical highlights booklet shows a
breakdown of direct energy program costs, while pages 4-14 show
subprograms costs for each of the Programs and for associated sup-
porting research. Our questions are concerned mainly with the
appropriateness of resource allocation among these programs and
We would appreciate your response as soon as possible, and at the
latest by February 10, 1976. Thank you for your cooperation and as-
Sincerely yours,
(1) Based on your participation in the Office of Technology Assess-
ment's analysis of the ERDA long range plan, how would you allo-
cate $1,000 to the various major programs in 1977?
Program: Amount
Conservation --------------
Fossil Energy --- -- - -- -- - -
Solar Energy -- --- -------- ---
Geothermal Energy ----- ---------
Fusion Power Development------ -----
Fission Reactor ------- -- --- --- ---
Development ------ -------------
Nuclear Fuel Cycle ------...---------
Environmental Control -- ---- -- -__ ______
Technology -------- ----------
(2) How would you allocate $1,000 to the subprograms in one or
more of the program areas with which you are familiar? For example,

1111111 11111111ill 011l ll WI W 1111111111111 111l111111111
7 3 1262 09113 8916

the subprograms in the conservation program are listed on page 4 of
the statistical highlight booklet as follows:
Subprograms: Amount
Electric Energy --------------------------
Energy Storage---------------------------------------------
Systems ---------------------------
Industry Conservation ----------- -----
Buildings Conservation ---------------------
Transportation Energy -- ----------- -- ----
Conservation --------------------- ----
Improved conversion ---------------------------------
Efficiency -------------------------------
(3) Please provide any comments or suggestions you might have re-
garding the proposed 1977 budget. Of special interest are opinions
reached by your panel regarding the long range plans, that are not re-
flected in next year's budget.